How will the Current Technological trends affect the Global Home Healthcare Market in the Long-Term?

Home Healthcare Market

Growth in this market is mainly driven by the growing geriatric population; increasing incidence of chronic diseases; and rising demand for affordable healthcare delivery systems due to increasing healthcare cost, technological advancements, and government initiatives to promote home healthcare.

The global home healthcare market is expected to reach USD 353.56 billion by 2022 from USD 237.05 billion in 2016, at a CAGR of 8.3%. The base year considered for the study is 2016 and the forecast period is from 2017 to 2022.

Rising incidence of chronic diseases

In recent years, chronic diseases that require long-term treatment have replaced infections as the primary cause of age-related death, and this shift is not limited to the developed world. Treating and managing chronic illnesses has become a major concern.

Nearly 50% of all home healthcare patients have at least one chronic illness, and this number is expected to keep increasing in future. Chronic diseases, which affect older adults disproportionately, contribute to disabilities, diminish the quality of life, and increase long-term care costs, thus opening an array of opportunities for various home healthcare companies.

Patients with chronic conditions reportedly show signs of early recovery when treated in a comfortable environment, such as in their homes. Chronic diseases such as diabetes, coronary artery disease (CAD), chronic obstructive pulmonary disease (COPD), asthma, hepatitis, and infectious diseases have increased the burden on healthcare systems across the globe. Globally, around 415 million people were affected by diabetes in 2011; by 2030, this number is expected to rise to 642 million (Source: IDF).

Around 80 to 85% of this population requires home healthcare for continuous monitoring of the disease. The number of deaths due to CAD has also increased—from 5.74 million in 1990 to 7.4 million in 2012 and 8.14 million in 2013—as estimated by the WHO. The global CAD burden is projected to increase from around 47 million DALYs (disability-adjusted life years) in 1990 to 82 million DALYs by 2020.

Changing reimbursement policies

In October 2014, the CMS announced changes to the Medicare home healthcare management prospective payment system for 2015 in the US. The changes reduced payments to home agencies by 0.3% (USD 60 million). The CMS cut payments by USD 260 million for 2016. Recently, in July 2017, CMS further proposed a 0.4% decrease, or a USD 80-million cut, for providers in 2018 and a USD 950-million cut for 2019.

The proposed model for 2019 also suggested changing the unit of care considered, from 60-day episodes of care to 30 days, with patients grouped into six different clinical categories.

These changes have significantly affected the stocks of some of the largest publicly traded home health companies in 2017. For instance, Amedisys’ shares went down by approximately 24.6% in July 2017. Many home healthcare providers declared that this cut would affect the overall quality of care that will be provided. If the quality of the care decreases, the market will be negatively affected.

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Untapped developing regions

Home healthcare is an established trend in the developed regions of North America and Europe. Due to favorable regulations and policies in these regions, homecare is rapidly being adopted. As the market in developed countries is nearly saturated, market players have shifted their focus towards the developing regions, especially the emerging economies of Asia and the Pacific region.

Asia has a huge population and a correspondingly huge patient base for medical conditions such as diabetes, asthma, and blood pressure, all of which require continuous monitoring. As the concept of home healthcare in countries like India and China is still in the early growth phase, market players can capitalize on a wide range of opportunities in these markets.

For instance, in April 2017, Quadria Capital (Singapore) invested USD 40 million (INR 250 crore) in Dabur family-owned HealthCare at Home (HCAH). In June 2015, India Home Health Care (IHHC) invested USD 10 million (over INR 600 million) to expand its presence in 50 cities of India. In addition, in February 2015, Nightingales Home Health Services (US) announced an investment of USD 40 to USD 50 million in the Indian market by expanding its home health services in 16 major cities in India. Such strategic alignments help global market players gain entry in the emerging economies and strengthen their businesses by expanding their customer base.

Based on service, the home healthcare market is segmented into rehabilitation therapy services, infusion therapy services, unskilled care services, respiratory therapy services, pregnancy care services, skilled nursing services, and hospice and palliative care services. The infusion therapy services segment is estimated to grow at the highest CAGR during the forecast period.

Based on product, the market is segmented into therapeutic products; testing, screening, & monitoring products; and mobility care products. The therapeutic products segment dominated the market in 2017 majorly due to the high and growing prevalence of chronic diseases (such as kidney failure, respiratory diseases, diabetes, and cancer) and the subsequent growth in the demand for therapeutic products that can be used for long-term care in home care settings.

The rising focus on reducing healthcare costs, as well as developments in the clinical administration of infusion therapy, have enabled the administration of this therapy in alternate settings. In the case of individuals requiring long-term infusion therapy, inpatient care is costly and prevents these patients from leading a normal lifestyle and resuming work activities. As a result, the demand for home infusion therapy is increasing at a high rate.

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Geographical Region Covered

In 2017, North America is expected to dominate the home healthcare market followed by Europe. The large share of this geographical segment is attributed to factors such as converging trends of aging population, technological advancement, and rising incidence of chronic diseases.

Asia is expected to grow at the highest CAGR during the forecast period. Factors such as rising geriatric population, increasing adoption of innovative techniques, increasing disposable income, expansion of home healthcare companies in this region, rising awareness of home healthcare, and increasing need for affordable healthcare delivery systems are expected to drive the growth of this market in Asia.

Leading Companies

Prominent players in the market include Philips Healthcare (Netherlands), Kindred Healthcare (US), Linde Group (Germany), Almost Family Inc. (US), Abbott Laboratories (US), LHC Group (US), A&D (Japan), Amedisys (US), Fresenius (Germany), Omron (Japan), McKesson (US), BAYADA Home Health Care (US), Kinnser Software, Inc. (US), and Roche (Switzerland).

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